Uganda’s trade deficit with the East African Community (EAC) widened to $809 million in August 2026 as imports from Kenya and Tanzania far outstripped exports, according to data compiled by the Uganda Development Bank’s research department.
Uganda earned $241.29 million from exports to the regional bloc, while imports amounted to $1.05 billion. The resulting deficit persisted despite trade surpluses with the Democratic Republic of Congo (DRC), South Sudan and Rwanda.
The regional imbalance contributed to a deterioration in Uganda’s overall merchandise trade position. The country’s trade deficit widened by 263.5 per cent from July to $817.03 million in August, as imports grew much faster than exports.
Export earnings increased by 6.4 per cent to $1.5 billion, while imports surged by 42 per cent to $2.31 billion. Despite the widening deficit, Uganda’s terms-of-trade index improved by 1.5 per cent, from 125.23 in July to 127.16 in August, indicating an improvement in export prices relative to import prices.
The deteriorating trade balance comes amid pressure on the Uganda shilling, with the Bank of Uganda partly attributing the currency’s weakness to external imbalances and other macroeconomic pressures. The depreciation has also raised concerns about imported inflation as the cost of foreign goods and production inputs rises.
Kenya accounted for the largest share of Uganda’s imports from the EAC, supplying goods worth approximately $714.5 million, compared with Ugandan exports valued at $41.05 million.
This left Uganda with a bilateral trade deficit of about $673.45 million. Kenya accounted for approximately 68 per cent of Uganda’s total imports from the regional bloc, making it the country’s largest source of EAC imports.
Tanzania was the second-largest source, supplying goods worth $203.6 million, equivalent to about 19.4 per cent of Uganda’s regional imports. Uganda’s exports to Tanzania amounted to only $13.8 million, resulting in a trade deficit of $189.8 million.
The deficits with Kenya and Tanzania, alongside the imbalance with Burundi, outweighed Uganda’s surpluses with other EAC partners. The DRC remained Uganda’s largest export market within the bloc and generated the country’s biggest bilateral trade surplus in August.
Exports to the DRC were valued at $84.3 million, while imports amounted to $7.21 million, resulting in a surplus of approximately $77.1 million.
Uganda also recorded a trade surplus of $56.71 million with South Sudan, earning $61.27 million from exports while importing goods worth $4.56 million. Trade with Rwanda generated a surplus of $21.89 million, with exports valued at $31.32 million against imports of $9.43 million.
However, these surpluses were insufficient to offset the much larger deficits with Kenya, Tanzania and Burundi.
The ministry of Finance, Planning and Economic Development has attributed Uganda’s deteriorating trade balance with EAC partners partly to persistent non-tariff barriers. These include protectionist measures, inconsistent regulations and arbitrary border policies that increase the cost of moving goods across the region.
In Tanzania, reported obstacles include non-standardised weighbridges, frequent roadblocks and a lack of mutual recognition of product standards and calibration certificates.
In Burundi, Ugandan traders have faced a 10 per cent surtax, known as the Surtaxe sur le Fer à Béton (SFB), on imported steel reinforcement bars. Ugandan exports to Kenya have also faced restrictions affecting dairy products, poultry and sugar.
Bilateral and regional engagements subsequently set July 1, 2026, as the deadline for removing trade barriers.
In October 2026, following a meeting between Presidents Yoweri Museveni and William Ruto, trade ministers from Uganda and Kenya signed an agreement aimed at eliminating remaining barriers affecting agricultural and industrial products.
Businesses, however, remain cautious about whether all restrictions will be permanently removed, given that some changes require legislative action before they can take full effect.
The persistence of these obstacles limits the ability of Ugandan producers to expand sales in neighbouring markets, even as the country continues to import substantial volumes of goods from within the region.
The widening trade deficit coincided with mixed performance among Uganda’s agricultural exports in August. Coffee, cotton, tea, sesame and beans recorded lower earnings, while fish and maize exports improved.
Coffee export earnings, Uganda’s leading agricultural export revenue source, fell by 11 per cent, from $204.08 million in July to $181.65 million in August.
The decline was mainly driven by a 12.86 per cent reduction in export volumes to 737,766 bags, each weighing 60 kilogrammes. The smaller decline in earnings compared with volumes suggests that higher average export prices partly cushioned the fall.
Cotton export earnings dropped by 59.5 per cent to $730,000, following a 59.67 per cent reduction in export volumes to 2,571.6 bales, each weighing 185 kilogrammes.
Tea earnings declined by 9.81 per cent, from $5.43 million to $4.90 million, as export volumes fell by 14.28 per cent to 5,114 tonnes.
Sesame earnings fell by 38.5 per cent to $740,000, while bean export revenues declined by 25.75 per cent to $3.61 million, with lower export volumes contributing to the reductions.
Fish and fish-product exports, excluding regional markets, performed better, with earnings rising by 14.38 per cent to $11.46 million.
The improvement was supported by a 6.72 per cent increase in export volumes, from 1,274.14 tonnes in July to 1,360 tonnes in August, alongside higher average export prices.
Maize exports also recorded stronger performance, with earnings increasing by 14 per cent to $13.3 million. The increase was supported by export volumes of 20,831 tonnes and higher average prices.
The August figures point to a widening gap between Uganda’s rapidly growing import bill and its export earnings.
While some agricultural commodities and regional markets continue to generate foreign exchange, the scale of imports from neighbouring countries and persistent barriers facing Ugandan exporters remain key challenges for the country’s trade balance.